The Perils of Free Corporate Spending

September 9, 2009

Guest Post

By Bert Brandenburg, executive director, Justice at Stake; For more information on Citizens United v. FEC see Justice at Stake's Gavel Grab.

Just three months ago, the U.S. Supreme Court reached a historic conclusion in Caperton v. Massey. The majority held that the Constitution sets limits on how much special interests can tilt the scales of justice, by requiring judges to step aside in certain case involving their supporters.

Citizens United today painted our nation's biggest political spenders as victims, barred and even "chilled" by unfair laws from participating in the political marketplace - echoing pretrial briefs by the group and its amicus backers.

In the real world of electioneering, that's a hard argument to buy. Whatever ails our nation's political system, it is not a shortage of special interest spending.

Justice at Stake is one of 40-plus groups to file an amicus brief in Citizens United, and one of a smaller number also to have filed in Caperton v. Massey. A comparison of the cases is revealing. While Caperton focused on the courts, its gritty facts should strip away any glossy illusions about what will happen if corporate and union treasuries are turned into private campaign war chests.

Even after state Supreme Court elections already had turned into a special interest arms race, coal executive Don Blankenship spent $3 million to elect a West Virginia Supreme Court judge, while appealing a $50 million jury award against his company. The newly elected justice voted to overturn the award.

Now consider some of the central arguments put forward by the deep pockets hovering around Citizens United:

• Corporate spending has no undue or distorting impact on elections. "As an initial matter," says the Citizens United brief, co-authored by Citizens United attorney Theodore B. Olson, "there is simply no evidence that corporate and union independent expenditures have a ‘corrosive and distorting effect[' on the election process."
• Requirements to raise money through political action committees are an unfair burden that deny many corporations a voice (Chamber of Commerce brief, echoed frequently today by Justice Antonin Scalia, who noted that the "vast majority" of corporations are small).
• Any restriction on campaign speech violates the First Amendment. As a brief by eight former FEC members said: "The pristine simplicity of the First Amendment's proscription of any law abridging speech ... now is replaced by a flood of complex restrictions. ... Core political activity is chilled." Olson revisited this issue today, raising the specter of small groups being charged with felonies.

Each of these arguments pales in the face of the fact pattern that generated Caperton, and has arisen again and again in state court and other elections in the past decade.

In Caperton - which involved an independent TV ad blitz, not Citizens United's video-on-demand documentary - the threat to government integrity was not just an issue, but the issue. Olson, then representing appellant Hugh Caperton, said bluntly: "The improper appearance created by money in judicial elections is one of the most important issues facing our judicial system today."

Similarly, as Solicitor General Ellen Kagan noted in her brief, it is "simply wrong" to say the ban on corporate treasury spending in any way limits the ability of companies to join the election debate. Corporate PACs, where contributions are voluntarily made by individual executives and employees, have spent literally billions on election campaigns-hardly in keeping with the image of hairdressers and local car dealers that Scalia more than once invoked.

Finally, the absolutist First Amendment argument that is underpinning a full-scale assault on all campaign finance laws: Any rule that chills, or even could chill, specific spending decisions must be struck down.

More than once, the Constitution states competing rights in absolute terms. A "pristine" reading of one passage ignores the tradeoffs needed to protect competing rights and needs in a functioning democracy. A good example is the right to cast a secret ballot. The First Amendment right to lobby voters stops 40 feet short of the polling station. Likewise, bribery has no free-speech protection.

In the 1976 case Buckley v. Valeo, the Supreme Court examined campaign finance law and the First Amendment when Watergate was still a fresh memory. As the Court said with simple eloquence: "The problem is not an illusory one."

The court found most of the post Watergate campaign laws consistent with the First Amendment. Contribution limits were a legitimate tool in fighting corruption. Campaign disclosure rules, even for so-called independent campaigns, also fought corruption, by informing the public of who was "paying to play."

One of the most fascinating disconnects between the Citizens United and Caperton hearings involved the issue of independent expenditures-ad campaigns run by third parties that have been given a protected status since Buckley v. Valeo. Olson opined in today's Citizens United hearing that with independent groups, "there is less of a threat of corruption because there is no quid pro quo." That reasoning may have seemed plausible in 1976, but not today. Independent ad campaigns are an enormous business.

The Caperton case, where Olson took the opposite side, involved almost entirely independent spending. Although Blankenship gave only $1,000 directly to the West Virginia justice, and spent $3 million on independent ads, Olson was clear in March that such a large expenditure did have an impact on the elected official. Olson, rightly in the Caperton case, said even an independent expenditure on this scale created a "probability of bias" on the justice's part, that required his removal. It's hard to square the two arguments.

After today's hearing, Senators John McCain (R-Ariz.) and Russell Feingold (D-Wis.) said they were openly disturbed by many of the justices' questions. "I was rather disappointed by the judges' apparent naivete about the effects of corporate and union money on the election process," McCain said. Added Feingold, "The idea that in the era of AIG and Exxon, we would allow corporate treasuries to destroy the political process, it seems like a very bizarre time to consider that."

The corporate treasury ban is our nation's oldest limit on federal election spending-passed in 1907, when government was seen as dominated by the "trusts."

In recent years, polls reveal a similar taint enveloping state courts: three Americans in four believe campaign cash affects courtroom decisions. If the federal ban is struck down, similar state laws will be next.

If anyone wonders whether that will have a real-world effect, they should look at Caperton once more and ask this: What if Don Blankenship, the coal executive with litigation in West Virginia, hadn't been forced to spend from his own pocket? What if he could have just cut a company check to underwrite an election? And what if an unwise ruling makes that the norm, not the exception?